Sell a house I am executor for, ‘cheap’ to a member of my family

Brie

My understanding is that when charities are beneficiaries they keep a very close eye on how well the estate will be maximised even to the point of objecting to the sale of property at a value less than they think acceptable.  Assuming you are talking of something way in the future it may actually be better to have a set amount stated to each charity rather than a percentage as they can't argue about a set amount.

theartfullodger

FreeBear said:

theartfullodger said: who knows what chancellor decides to do with CGT rules

Capital Gains Tax allowance is going down to £3,000 next year - I suspect he would like to get rid of the allowance completely and charge you 20% on any/all profit you make. But there will be loopholes that his rich buddies can exploit to reduce any liability to zero.

I know: More than annoying but hey. someone's got to pay for the huge contracts given to Tory chums... 

I've got shareholdings CGT & a couple of BTLs to shift. Gonna be painful! Absolutely I am not looking for sympathy. 

km1500

If a percentage of the estate is left to charity, all you are required to do.is leave that percentage of the market value of the estate to them

As long as you do this they will he happy.

wilfred30

km1500 said:

If a percentage of the estate is left to charity, all you are required to do.is leave that percentage of the market value of the estate to them

As long as you do this they will he happy.

But if the OP intends on selling the house to a relative cheaply i.e. under market value, the charities most certainly will not be happy as the actual amount they receive will be reduced.

Flugelhorn

wilfred30 said:

km1500 said:

If a percentage of the estate is left to charity, all you are required to do.is leave that percentage of the market value of the estate to them

As long as you do this they will he happy.

But if the OP intends on selling the house to a relative cheaply i.e. under market value, the charities most certainly will not be happy as the actual amount they receive will be reduced.

the charity would still get the percentage of the market value, say market value is 200K - they are promised 25% = 50K. They sell the house for 150K and the charity still gets 50K but the other beneficiaries get rather less.

user1977

Flugelhorn said:

wilfred30 said:

km1500 said:

If a percentage of the estate is left to charity, all you are required to do.is leave that percentage of the market value of the estate to them

As long as you do this they will he happy.

But if the OP intends on selling the house to a relative cheaply i.e. under market value, the charities most certainly will not be happy as the actual amount they receive will be reduced.

the charity would still get the percentage of the market value, say market value is 200K - they are promised 25% = 50K. They sell the house for 150K and the charity still gets 50K but the other beneficiaries get rather less.

Yes, in theory, but the OP doesn't suggest that there are any non-charity residuary beneficiaries, and even if there were I can't see the point of such an arrangement.

Flugelhorn

user1977 said:

Flugelhorn said:

wilfred30 said:

km1500 said:

If a percentage of the estate is left to charity, all you are required to do.is leave that percentage of the market value of the estate to them

As long as you do this they will he happy.

But if the OP intends on selling the house to a relative cheaply i.e. under market value, the charities most certainly will not be happy as the actual amount they receive will be reduced.

the charity would still get the percentage of the market value, say market value is 200K - they are promised 25% = 50K. They sell the house for 150K and the charity still gets 50K but the other beneficiaries get rather less.

Yes, in theory, but the OP doesn't suggest that there are any non-charity residuary beneficiaries, and even if there were I can't see the point of such an arrangement.

there is no point, the problem with this whole thing is that the exec has probably got a lot of work for no personal benefit 

km1500

Example (simplified of course)

1. value the estate at fair market value. Say 500k house only.

2. pay whatever % is given to charity - say 10% - 50k

3. pay IHT due on a 500k estate

4. sell.the house to family member for whatever price you want provided all the remaining benificiaries agree. Purchaser will pay stamp duty on 500k though.

MobileSaver

BiturboV12 said:

So here is the thing. If I sell the house to a family member cheap, the beneficiaries are charities. I believe they employ people to go on the hunt for money where  they fell they’ve been short changed on?

Yes, charities will do absolutely everything in their power to ensure they get what they think they are legally entitled to. If you sell the house on the cheap then you as executor will be personally liable for their share of the discount you give.

It's a bit late now but if the only beneficiaries are charities then most people would have renounced the executor duties and let the charities handle it all themselves...

Keep_pedalling

BiturboV12 said:

So here is the thing. If I sell the house to a family member cheap, the beneficiaries are charities. I believe they employ people to go on the hunt for money where  they fell they’ve been short changed on?

That would be outright fraud, sounds like the testator has made a very poor choice in executors. Unless you want to land yourself in a whole heap of trouble, sell on the open market or, it’s not too late, renounce your executors powers.